BlackBerry provided more detail on its devices business in the quarter to 31 August, a period which saw it taking a $934 million inventory charge following muted demand for its former flagship Z10 smartphone.
The company said that the number of BlackBerry handheld devices “recognised” decreased by approximately 3.7 million, or 50 per cent, from 7.4 million, with “most” of these being BlackBerry 7 devices, “in part because the company deferred revenue related to BlackBerry Z10 smartphones shipped in the second quarter of fiscal 2014 as they did not meet the revenue recognition criteria that the price be fixed or determinable”.
BlackBerry said that during the quarter approximately 5.9 million BlackBerry smartphones were sold through to end customers, which included devices shipped in the prior quarter, reducing its inventory in channel. Of this 5.9 million, approximately 4.2 million were BB7 devices.
For comparison, 6.4 million smartphones made it into the hands of customers in the prior sequential quarter, and 9.5 million in the same quarter last year.
In order to drive demand, it said it “plans to implement further sales incentives with its carrier and distributor partners to increase sell-through, which could be applicable to all BlackBerry 10 devices shipped in the second quarter of fiscal 2014”.
In its management discussion for the period, BlackBerry said that its device sales had decreased during its fiscal Q2 due to “the maturing smartphone market and very intense competition”.
In addition, delays with the launch of certain features of the enterprise BES 10 platform, as well as availability of competing products, slowed adoption among enterprises, “many of which look to deploy BlackBerry 10 hardware and software simultaneously to optimise security through the integrated BlackBerry end-to-end solution”.
Late last month, BlackBerry said that it is to cut its device portfolio and focus on enterprise and prosumer markets. It recently announced it latest high-end device, Z30, which has seen its previous flagship, Z10, repositioned as mid-tier.
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